Bermuda re/insurers to report on bridge collapse losses
The Bermuda Monetary Authority has asked re/insurers to report their "best estimates" on their exposure to the Baltimore Bridge collapse in their first quarter financial returns.
Insurance Groups, Class 4, Class 3A and Class 3B insurers are all being asked to report estimated losses for claims including property, liability and contingent business interruption.
The potential losses stem from the collision of a 985-foot Singapore-flagged container ship, the Dali, lost power while leaving the Port of Baltimore and slammed into one of the bridge’s support pillars, bringing down the bridge and causing six deaths. The collision is expected to result in billions of dollars in losses.
If the shipowner is found liable, its insurer, a mutual association called Britannia P&I Club, will cover the first $10 million of claims, which could include coverage for loss of lives, debris removal, property damage and cargo damage.
Beyond $10 million, the 12 clubs including Britannia that make up the London-based International Group of P&I Clubs, which collectively insure about 90 percent of the world’s oceangoing tonnage, would share the cost of claims of up to $100 million. For claims above $100 million, dozens of reinsurers will cover costs up to roughly $3 billion.
AXA XL leads the IG’s $3 billion reinsurance programme, which is supported by a consortium of large international reinsurers. S&P has said reinsurance rates could rise in the wake of the disaster.
Chubb is the lead market on the property placement for the bridge, but it is likely that the property claim will be subrogated to the shipowner’s insurance.
The BMA said: "The Authority continues to monitor worldwide catastrophe events and Bermuda’s role in providing (re)insurance coverage. The Authority requests that Insurance Groups, Class 4, Class 3B and Class 3A Insurers who are required to provide quarterly financial returns include their exposure to the Francis Scott Key Bridge collapse on 26 March 2024 (that occurred in Baltimore, Maryland, USA) in the ‘Catastrophe Exposure’ tab return under ‘Underwriting Loss Event #1’.
"The estimated losses should include (but not be limited to) property, liability and contingent business interruption related to such loss.
"The Authority recognises that loss estimates for the aforementioned event may still be in the development phase and require insurance groups and commercial insurers report their preliminary best estimates available when filing the quarterly financial return."
Separately, the BMA said the only other change to its quarterly financial return templates for the first quarter was in relation to general business insurers, which report under IFRS accounting principles; the liquidity risk calculation has been updated to be consistent with the prescribed Insurance Account Amendment Rules 2024 format.
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